you are a smart guy. I never would have thought of this because my mind does not think govt ever gets anything right... but that is an ingenious leftist way of thinking about things. We can just interfere with the market till we get it just right? As opposed to my thought - let them risk their own asses instead of the tax payers.
How do you prevent them from risking depositor assets while they risk their own? G.S. is one approach, do you disagree with that too?
With all the hand-wringing, finger-pointing and demagoguery from DC for the past 5 yrs, I find it hard to believe that Obama would veto it or that there wouldn't be a veto-proof majority behind this. But then again, I might be willfully ignorant on such matters.
Where does this laissez faire philosophy break down for you? Food safety, maybe? Or is it simply buyer beware there, too?
Like I said in some old threads, this is a very typical "bankster" meme that allows them to eschew all responsibility for the crisis. It's popularized by people like Charles Calomiris, Edward Pinto, Peter Wallison and some others. There's an over-abundance of evidence that demonstrates that blaming the CRA is nothing but an attempt by the financial industry lobby to return to business as usual ASAP. It's also reasonably clear that the repeal of Glass-Steagall had a lot to do with the crisis. The "blame the CRA" mis-direction has a lot of fans on these forums. Like yourself, I applaud Warren's attempt to do the right thing and hope she succeeds.
And why do you think they were over-leveraged? Why do you think it was so important to bail them out? Do you not think there'd be more resistance to bail them out if there were no depositors to worry about? If banks could not leverage up like they did?
how is this post from 2010 06-24-10 10:36 AM You all act as if this market placed was not rigged. Look until the Wall Street con men realized they were back stopped by the government... people in CA for had to pay 4- 6 points higher in their interest rates and 2-4% to hard money lenders for the last 20% of the loan. (because we had some non recourse loans.) Then Wall Street set up the big fraud in which they underpriced the hard money guys. They could do this because they were not risking their own money. They were selling China's money but China new the Fed would back stop them. Now after the systems crumbled we have the FHA spending over a trillion dollars - giving out below market mortgages at 96.5 to 100%... to save the banks and stablize the low end of the market. --- The market worked fine until Clinton eliminated glass steagall, congress choose not to regulate CDOS, wall street went from partnerships to corporations --- and Barney Frank Chris Dodd on most of Congress sold themselves to banks. Get the government back stops out of banking. You will see market, risk, loans and interest rates balance out again. We will instantly see higher interest rates and lower house prices. -- by the way if you read my first post on this thread, you see I said bravo to the new glass steagall idea. if we are going to back stop... and the banks are going to take bailouts we have to separate the tax payers from the leveraged speculation.
Not only risking the assets, but using them to be able to lever up so greatly! Take away the deposits and watch what happens with leverage.
Ok, misread you. I also think G.S. type regulation is appropriate. Even without a flood of foreign capital, the gamblers create their own currency through leveraging their receivables, aka collateral chains. Let 'em do it, but not with depositor money.